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4 Stocks With Solid Net Profit Margin to Strengthen Your Portfolio
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Key Takeaways
FLXS, ARKO, SNEX and ALTO show strong net margins and upward EPS revisions for the current fiscal.
All four stocks have a Zacks Rank of 1 or 2 and a VGM Score of A or B, indicating solid upside potential.
Each company has an impressive track record of beating earnings estimates.
The primary purpose of a business is to generate profits that can be reinvested in expansion or distributed to reward shareholders. The net profit margin is an effective tool for measuring the profits a business reaps.
A higher net margin underlines a company’s efficiency in translating sales into actual profits. This metric offers insight into how well a company is run and the headwinds weighing on it. Flexsteel Industries, Inc. (FLXS - Free Report) , ARKO Corporation (ARKO - Free Report) , StoneX Group Inc. (SNEX - Free Report) and Alto Ingredients Inc. (ALTO - Free Report) boast solid net profit margins.
Net Profit Margin = Net profit/Sales * 100
In simple terms, net profit is the amount a company retains after deducting all costs, interest, depreciation, taxes and other expenses. In fact, net profit margin can turn out to be a potent point of reference to gauge the strength of a company’s operations and its cost-control measures.
A higher net profit is essential for rewarding stakeholders. Strength in the metric not only attracts investors but also draws well-skilled employees who eventually enhance the value of a business.
A higher net profit margin compared with its peers provides a company with a competitive edge.
Pros and Cons
Net profit margin helps investors gain clarity on a company’s business model in terms of pricing policy, cost structure and manufacturing efficiency. Hence, a strong net profit margin is preferred by all classes of investors.
However, net profit margin, as an investment criterion, has its share of pitfalls. The metric varies widely from industry to industry. While net income is a key metric for investment measurement in traditional industries, it is not that important for technology companies.
In addition, the difference in accounting treatment of various items — especially non-cash expenses like depreciation and stock-based compensation — makes comparison a daunting task.
Furthermore, for companies preferring to grow with debt instead of equity funding, higher interest expenses usually weigh on net profit. In such cases, the measure is rendered ineffective while analyzing a company’s performance.
The Winning Strategy
A healthy net profit margin and solid EPS growth are the two most sought-after elements in a business model.
Apart from these, we have added a few criteria to ensure maximum returns from this strategy.
Screening Parameters
Net Margin 12 months – Most Recent (%) greater than equal to 0: High net profit margin indicates solid profitability.
Percentage Change in EPS F(0)/(F-1) greater than equal to 0: It indicates earnings growth.
Average Broker Rating (1-5) equal to 1: A rating of #1 indicates brokers’ extreme bullishness on the stock.
Zacks Rank less than or equal to 2: Stocks with a Zacks Rank #1 (Strong Buy) or 2 (Buy) generally perform better than their peers in all types of market environments.
VGM Score of A or B: Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 or 2, offer the best upside potential.
Let us discuss the abovementioned four stocks out of the 12 stocks that qualified the screening.
Flexsteel Industries is a manufacturer, importer and marketer of residential furniture products, including upholstered seating, recliners, sofas and home furnishings sold through a network of furniture retailers and e-commerce channels. The stock currently sports a Zacks Rank of 1 and has a VGM Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Flexsteel Industries’ fiscal 2026 earnings has been revised upward by 13 cents to $4.78 per share over the past 30 days. FLXS beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 59%.
ARKO is a Fortune 500 company and one of the largest operators of convenience stores and wholesalers of fuel in the United States. The stock sports a Zacks Rank #1 and has a VGM Score of A.
The Zacks Consensus Estimate for ARKO’s 2026 earnings has been revised upward by 3 cents to 29 cents per share over the past 30 days. ARKO surpassed the Zacks Consensus Estimate thrice in the trailing four quarters and missed it once, the average surprise being 43.23%.
StoneX Group is a global financial services company that provides trading, risk management, market access, clearing and payment solutions across asset classes, including commodities, securities, foreign exchange and derivatives. The stock sports a Zacks Rank #1 and has a VGM Score of B.
The Zacks Consensus Estimate for StoneX Group’s fiscal 2026 earnings has moved northward by 13.9% to $6.00 per share over the past 60 days. SNEX beat the Zacks Consensus Estimate twice in the trailing four quarters and missed it on two occasions, with an average surprise of 9.47%.
Alto Ingredients is a producer and distributor of specialty alcohols, renewable fuels and essential ingredients derived from corn, serving markets such as food and beverage, pharmaceuticals, personal care, industrial products and clean energy. The stock carries a Zacks Rank of 2 and has a VGM Score of A.
The Zacks Consensus Estimate for Alto Ingredients’ 2026 earnings has been revised upward by 184.2% to 54 cents per share over the past 60 days. ALTO beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 361.46%.
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4 Stocks With Solid Net Profit Margin to Strengthen Your Portfolio
Key Takeaways
The primary purpose of a business is to generate profits that can be reinvested in expansion or distributed to reward shareholders. The net profit margin is an effective tool for measuring the profits a business reaps.
A higher net margin underlines a company’s efficiency in translating sales into actual profits. This metric offers insight into how well a company is run and the headwinds weighing on it. Flexsteel Industries, Inc. (FLXS - Free Report) , ARKO Corporation (ARKO - Free Report) , StoneX Group Inc. (SNEX - Free Report) and Alto Ingredients Inc. (ALTO - Free Report) boast solid net profit margins.
Net Profit Margin = Net profit/Sales * 100
In simple terms, net profit is the amount a company retains after deducting all costs, interest, depreciation, taxes and other expenses. In fact, net profit margin can turn out to be a potent point of reference to gauge the strength of a company’s operations and its cost-control measures.
A higher net profit is essential for rewarding stakeholders. Strength in the metric not only attracts investors but also draws well-skilled employees who eventually enhance the value of a business.
A higher net profit margin compared with its peers provides a company with a competitive edge.
Pros and Cons
Net profit margin helps investors gain clarity on a company’s business model in terms of pricing policy, cost structure and manufacturing efficiency. Hence, a strong net profit margin is preferred by all classes of investors.
However, net profit margin, as an investment criterion, has its share of pitfalls. The metric varies widely from industry to industry. While net income is a key metric for investment measurement in traditional industries, it is not that important for technology companies.
In addition, the difference in accounting treatment of various items — especially non-cash expenses like depreciation and stock-based compensation — makes comparison a daunting task.
Furthermore, for companies preferring to grow with debt instead of equity funding, higher interest expenses usually weigh on net profit. In such cases, the measure is rendered ineffective while analyzing a company’s performance.
The Winning Strategy
A healthy net profit margin and solid EPS growth are the two most sought-after elements in a business model.
Apart from these, we have added a few criteria to ensure maximum returns from this strategy.
Screening Parameters
Net Margin 12 months – Most Recent (%) greater than equal to 0: High net profit margin indicates solid profitability.
Percentage Change in EPS F(0)/(F-1) greater than equal to 0: It indicates earnings growth.
Average Broker Rating (1-5) equal to 1: A rating of #1 indicates brokers’ extreme bullishness on the stock.
Zacks Rank less than or equal to 2: Stocks with a Zacks Rank #1 (Strong Buy) or 2 (Buy) generally perform better than their peers in all types of market environments.
VGM Score of A or B: Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 or 2, offer the best upside potential.
Let us discuss the abovementioned four stocks out of the 12 stocks that qualified the screening.
Flexsteel Industries is a manufacturer, importer and marketer of residential furniture products, including upholstered seating, recliners, sofas and home furnishings sold through a network of furniture retailers and e-commerce channels. The stock currently sports a Zacks Rank of 1 and has a VGM Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Flexsteel Industries’ fiscal 2026 earnings has been revised upward by 13 cents to $4.78 per share over the past 30 days. FLXS beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 59%.
ARKO is a Fortune 500 company and one of the largest operators of convenience stores and wholesalers of fuel in the United States. The stock sports a Zacks Rank #1 and has a VGM Score of A.
The Zacks Consensus Estimate for ARKO’s 2026 earnings has been revised upward by 3 cents to 29 cents per share over the past 30 days. ARKO surpassed the Zacks Consensus Estimate thrice in the trailing four quarters and missed it once, the average surprise being 43.23%.
StoneX Group is a global financial services company that provides trading, risk management, market access, clearing and payment solutions across asset classes, including commodities, securities, foreign exchange and derivatives. The stock sports a Zacks Rank #1 and has a VGM Score of B.
The Zacks Consensus Estimate for StoneX Group’s fiscal 2026 earnings has moved northward by 13.9% to $6.00 per share over the past 60 days. SNEX beat the Zacks Consensus Estimate twice in the trailing four quarters and missed it on two occasions, with an average surprise of 9.47%.
Alto Ingredients is a producer and distributor of specialty alcohols, renewable fuels and essential ingredients derived from corn, serving markets such as food and beverage, pharmaceuticals, personal care, industrial products and clean energy. The stock carries a Zacks Rank of 2 and has a VGM Score of A.
The Zacks Consensus Estimate for Alto Ingredients’ 2026 earnings has been revised upward by 184.2% to 54 cents per share over the past 60 days. ALTO beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 361.46%.